10/01/2010 @ 11:15AM

United, Continental Finalize Merger

United and Continental have completed their merger, now both existing as wholly owned subsidiaries of United Continental Holdings, formerly UAL Corporation.

The combined company’s 16-member board includes Continental’s Jeff Smisek, who will serve as president and CEO, UAL’s Glenn Tilton, who becomes non-executive chairman, six independent directors from each carrier and a pair of union representatives.

Smisek said on a conference call Friday that he expects the merger to generate as much as $1.2 billion in “net annual synergies” by 2013, with $800 million to $900 million in additional annual revenue and $200 million to $300 million in cost savings. When asked about layoffs the call, Smisek said they will be “minimal.” “We are being very careful and thoughtful in the process of integrating the headquarters. I am OK with taking time with it because I want to make sure we are treating everyone fairly,” he added.

JPMorgan set a price target for the combined company
United Continental Holdings
at $34. “We continue to envision a prosperous 2011 for U.S. airlines, assuming tepid economic trends and oil in the $80 range. It is against this backdrop that we anticipate balance sheet repair will emerge as a collective industry theme,” they said in a note to investors. Shares were trading at $24.46, down 53 cents, on the New York Stock Exchange Friday.

Business travel is a big part of the airline’s new plan, allowing them to focus the resources and fleets of two carriers in offering a premium, streamlined approach to the business customer. “We’re very focused on business travelers,” Smisek said. “We want to offer them a very compelling proposition of flying on a single carrier and getting a premium experience.”

“This sets us on a path to create the world’s leading airline from a position of strength, with one of the industry’s best cash positions, industry-leading revenues and a competitive cost structure,” Tilton said.

Rival
Delta Air Lines
was trading slightly higher, up 14 cents to $11.78, while
Southwest Airlines
, which announced plans earlier this week to acquire
AirTran Holdings
, was unchanged at $13.07.